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12/13/2016Inside Startup Fundraising – Bay Area 2016 Join Pillsbury senior associate Deborah A. Carrillo as she speaks during a 2-hour breakfast session on startup fundraising. Topics will include the process of a raise, pre-money and post-money valuation, understanding dilution, negotiating your best VC deal, term sheets: what you need to know and more.

11/21/2016PHH v. CFPB, Part II: CFPB's RESPA Duplicate FailAuthors:
Mercedes K. Tunstall,
Elizabeth Vella Moeller,
Michael J. Halloran,
Rodney R. Peck,
Christine A. Scheuneman,
Craig J. Saperstein,
Andrew Caplan, Nathalie Prescott*
Part I of this alert addressed the DC Circuit’s holding in PHH Corp. v. CFPB that the Consumer Financial Protection Bureau’s single director structure is unconstitutional. Part II addresses the next part of the opinion, where the DC Circuit found that the CFPB misinterpreted the Real Estate Settlement Procedures Act (RESPA), violated due process by retroactively applying the misinterpretation to PHH Corp., and failed to apply RESPA’s statute of limitations in contravention of the Dodd-Frank Act’s authorizing provisions. The decision substantially reins in the CFPB’s power; in response, the CFPB filed a petition for rehearing en banc to the DC Circuit Court of Appeals last Friday.

10/19/2016PHH v. CFPB, Part I: President of Consumer Finance No MoreCFPB’s Single-Director Structure Found to Be UnconstitutionalAuthors:
Mercedes K. Tunstall,
Elizabeth Vella Moeller,
Michael J. Halloran,
Christine A. Scheuneman,
Craig J. Saperstein,
Andrew Caplan
In response to a challenge from mortgage servicer PHH Corp. regarding the constitutionality of the single director structure of the Consumer Financial Protection Bureau (the CFPB or Bureau), the United States Court of Appeals, District of Columbia Circuit (the DC Circuit) found that independent agencies, such as the CFPB, must be led by multi-member commissions in order to be constitutional.1 To cure this unconstitutional structure, the DC Circuit used the Dodd-Frank Act’s severability clause and effectively deleted the provision that the President may remove the CFPB director only for “inefficiency, neglect of duty or malfeasance of office.” The practical effect of removing this “removal for cause” clause is that the CFPB is now an executive agency which may have a single director (akin to the Department of Commerce or Environmental Protection Agency), and Director Cordray must follow the direction of the President of the United States.

2/5/2015New York Revises “BitLicense” Regulations for Virtual Currency BusinessesAuthors:
Jeffrey Jacobi, Marco A. Santori
Seven months after releasing its BitLicense proposal, the State of New York has published substantial revisions. Like the original version, the revised regulations apply more broadly than federal regulations and require many virtual currency businesses that “involve” the State of New York or customers located or operating within New York to obtain a license.

1/8/2014CFPB's Arbitration Study—A Warning to Consumer Financial Service CompaniesThis alert was originally published in Law360 on January 17, 2014.Authors:
Christine A. Scheuneman,
Amy L. Pierce, Joseph T. Lynyak, III
On December 12, 2013, the Consumer Financial Protection Bureau published its “Arbitration Study Preliminary Results,” mandated by Section 1028(a) of the Dodd-Frank Act (the “Study”). Unfortunately (and despite its statements to the contrary), the Study could be read as evidence that the CFPB intends to either ban or to severely limit arbitration provisions in consumer financial service contracts. Lenders and other financial service providers should consider the Study’s approach, possible actions by the CFPB, and steps that can be taken in anticipation of those actions.

6/11/2013Meeting New OTC Swap Reconciliation Rules May Require Better Technology and ProcessesAuthors:
Mike Pierides, Alistair J. Charleton
Although reconciliation of the key terms has been a best practice for over-the-counter derivative trades for some time (particularly with collateralised trades), the scale of the reconciliation exercise imposed by forthcoming regulations in the EU and U.S. has caused many market participants to undertake a fundamental review of the systems and processes in place. For many, compliance can only be achieved by utilising a third party for provision of an appropriate technology platform or an end-to-end service. With imminent compliance deadlines and the late development of the requirements themselves, functionality has understandably been the focus of any sourcing process. However, from a supply chain and outsourcing perspective, a key challenge remains the manner in which the financial services-specific regulations are applied to this type of third-party arrangement.

1/28/2013D.C. Circuit Court Decision Calls Into Question the Constitutionality of the Appointment of the Director of the CFPBAuthors:
Rodney R. Peck,
Michael J. Halloran, Joseph T. Lynyak, III This Alert analyzes the possible implications of the January 25,2013 decision of the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) that limits the ability of the President of the United States to utilize the recess authority to circumvent the authority of the U.S. Senate to “advice and consent” to proposed nominations. Specifically, this analysis discusses whether the appointment of the Director of the Consumer Financial Protection Bureau (the “CFPB”) was flawed, and thereby nullifies or otherwise limits actions taken by the CFPB since the Director was appointed by the President, purportedly using the recess appointment authority.

11/29/2016The CFPB under Trump: Debunking Some PreconceptionsSource: Law360Authors:
Andrew Caplan,
Mercedes K. Tunstall
For financial institutions that have been operating under the weight of the Consumer Financial Protection Bureau for the past five years—with its aggressive enforcement actions and prolific rulemakings—a Trump administration may seem like welcome news. Indeed, a core tenet of the still-evolving Donald Trump agenda is to roll back the pace and coverage of federal regulations generally, and banking regulations in particular. The president-elect has at times even called for complete repeal of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Great Recession-era financial reform law that, among other things, gave life to the CFPB.